One giant at a time


In a world where governments toss around billions like pennies, it’s not much.

But for 100 people, this means the end of their jobs. For some commercial landlords, it means 12 more Big Box stores will be empty soon. For suppliers, it means $5 million in bad debts at a time nobody can afford any. For southern Ontario-based Giant Carpet, it’s lights out.

This is how the economy is dying, one retailer, one parts manufacturer, one exporter, one rig company, one shop at a time. And it’s just really starting. Brave words by the Bank of Canada won’t bring rug-buying customers through the door. Misleading statements from politicians and bankers in newspapers too few people read anymore won’t do it, either. This is the big one.

Ford reported on Thursday it lost almost $6 billion in the last three months – and it’s the healthiest of the car companies. New home sales in the US crashed by 15% to the lowest point on record. Brand new houses are now selling for an average of $206,000, down another 9%. If not another new house were built for a year, no buyer would go unsatisfied.

Gold has broken through the $900 mark and its boosters are calling for much more. Oil is sinking again, now back to the $40 mark. The Obama rescue package looks like it may sideswipe Canadian products by permitting only US-made stuff to be used in public works projects. And in Canada, one day after the budget, the new debt and deficits, nobody feels more confident.

In the last two hours I received three emails from career realtors asking me for personal advice. They’re all in their fifties, all successful by industry standards, all owning multiple properties, all of them scared. While the people in charge of their real estate associations madly reassure the public they should buy now before prices vault higher, the folks on the street know otherwise.

So, is it all doom?

Of course not. In every reversal there’s opportunity. Real estate is becoming more affordable. Governments are relearning the fact they can’t tax without end. Regulators are realizing how much they screwed up. Bankers are waking up to the crisis their lax lending policies caused. MPs, I hope, see how careless they were in gutting mortgage standards and pissing away our nation’s budget surplus. Now when citizens need help, we must borrow to do so.

Recovery and growth will come. They’ll be led by financial markets, lagged badly by housing markets. Jobs will return, but in tens and dozens, after being lost in hundreds and thousands.

Between now and then it gets worse.  But maybe when we get there, the world will be a more honest place.


Today’s blog: Chain of Fools


#1 Jace on 01.29.09 at 6:29 pm


I want to buy a place in Edmonton this summer. I have a 20% downpayment, looking at buying something for less than 3x my annual wage and it will only cost about $200 a month more than the rent on my current 1 bedroom apartment.

My job is secure, I know it’s hard to believe, but I have an extremely specialized position with a company that has nothing to do with the local energy sector and is flush for cash for this downturn.

I’m aware that we could potentially lose another 10-20% off the value of our home if we buy now, but we need more than this 1 bedroom apartment with a baby on the way. The place that we’re looking at buying is under $275k, so renting at 1500 a month for 2 more years will cost us as much as losing 15% of our homes value.

At what point is getting back into the market worth it?

#2 dd on 01.29.09 at 7:00 pm

“So, is it all doom?

Of course not …. Real estate is becoming more affordable. Governments are relearning the fact they can’t tax without end. Regulators are realizing how much they screwed up. Bankers are waking up to the crisis their lax lending policies caused.”

Garth, should start bloging about the above issues in more detail. We really need some leadership. Yes … I know you didn’t win a seat this time around … our loss. However you are one of few out there that is bringing the real issues to the front burner.

#3 Slice on 01.29.09 at 7:02 pm

Some time back my father bought a house on old Kingston Road in Scarborough for $67,000. Late seventies I think. It was a nice ranch house, street number 6415. Anyway, we held onto it for ten years. We sold it sometime in the 1980’s for… $68,000.

Time to scale back, stop acting like we all deserve to be rich. No more making money by shuffling papers around.

Time to work for our money again, when we eventually get the chance.

Cheers, everyone.

#4 squidly77 on 01.29.09 at 7:21 pm

2,588 people filed bankruptcy papers in calgary for the month of nov/08

pro rate that by 12 months and its 31,056 calgarians
31,056 bankruptcies could effect 100,000 calgary families and the dust up has barely begun

people have no idea and i mean no idea just how bad and how quick this bust is going to get
its a total and complete unwinding

it is gloom and doom but its also very very real
and its happening right now

blogs like this one give you an opportunity to prepare and rationalize a plan to cope with whats coming
it gives you a leg up over everyone else

the general public is in a state of denial and claim that blogs like this one and posters like myself are alarmist nuts or any other name they can pin on us hoping that we will just go away and then everything will be alright

hiding under the bed will not work this time around
this thing is far to big and its to damned ugly

the last time this happened it started WW2
what will be the result of this one
the outcome will be written by the new babies being born today

#5 squidly77 on 01.29.09 at 7:24 pm

that is of course if we dont blow ourselves up in the meantime..

#6 [email protected] on 01.29.09 at 7:36 pm

“We confess our little faults to persuade people that we have no large ones.”

Slowly but surely the big skeletons will come out.
People have started realizing how bad its gonna be…before it gets better.

#7 squidly77 on 01.29.09 at 7:47 pm

the small article below is an indication of whats coming

Edmonton owner Dan White has not paid the 13 office staff members for five weeks, while the 32 mill workers have gone three weeks without pay.

If the tanks rupture in the -30 C temperatures, a chlorine gas cloud could descend on the nearby town, potentially killing anybody in its path.

The order was issued Sunday after staff at the pulp mill said Friday evening they would shut down the mill’s power boiler and not show up for work Monday morning

now consider if this situation should occur at a nuclear or large petrochemical facility

in the above the government passed an order forcing the workers back to work with a guarantee of payment

in the future the government may not have the ability to be everywhere at all times with an open wallet

#8 eddy on 01.29.09 at 7:48 pm

“Real estate is becoming more affordable. ”

it’s a good news story!

Realtors in there fifties sitting on multiple properties?? Well, a few months back we had the highest prices in history, that would have been the time to unload and take early retirement.

#9 Rob Jensen on 01.29.09 at 7:48 pm

Just wait until the Obama Gov’t starts working away at the trade deficit. Bit by bit eliminating imports to keep the money, taxes and jobs at home.

It won’t be just one store at a time here in Canada……

#10 Alberta Ed on 01.29.09 at 7:49 pm

“Governments are relearning the fact they can’t tax without end.” Someone ought to tell Calgary Mayor ‘Bronco’ Bronconnier and Premier ‘What Me Worry’ Stelmach. Wait… Steady Eddie just announced that MLAs will be ‘tightening their belts this spring’ and bypassing an automatic cost-of-living related pay increase. Wow! You can just feel their pain.

#11 colette on 01.29.09 at 8:04 pm

Just made a trip to BC’s Northern Capital. The stores were busy, the restaurants were busy, the music festival was sold out. In Earls I overheard people in their early 50’s discussing retirement that they were now enjoying…property in Mexico, new houses…vactions.

I guess some people did things right and have a nest egg and are enjoying the good life? Nobody seemed worried.

And this from the boom and bust capital of BC!

#12 Rural Rick on 01.29.09 at 8:05 pm

Is it is the people that matter. Like the 100 souls that lost their jobs. The stress that they are enduring now.
Peace unto them.
You would like to blame some one for this. But like Pogo said we have seen the enemy and it is us. If we had paid more attention and insisted on higher standards could we have avoided this?
Maybe, probably not.
Some will learn from this, not enough to avoid a repeat. But next time there will be more people on the sidelines saying hey watch out! After a few more screw ups like this and maybe we will get some sensible regulation of finance.
In the mean times remember the human equation…
Sorrow shared is diminished
Joy shared is increased

#13 dd on 01.29.09 at 8:13 pm

#1 Jace,

What if you could lose up to 25-30% of the value? Rent monthly or 6 month terms. Rental rates will drop.

#14 dd on 01.29.09 at 8:16 pm

#11 colette,

Ft St John is a little different from Vancouver or Victoria. The Horn gas play might have something to do with the busy nature of the town. On a related note I heard that Encana just walk 100 engineers to the door. They are big up there so Nothern BC might want to think different.

#15 North Vancouver Citizen on 01.29.09 at 8:24 pm

In an earlier post I predicted the U.S. will liberate Cuba…making that an @ $1 trillion new found asset.

…I have two suggestions for Canada.


..Canada could sneek into Alaska with our armed forces and Navy and liberate Alaska from governor Palin.



I prefer this one….let’s sell the U.S. both Quebec and the Atlantic Provinces.

In lieu of the U.S. assuming their proportionate Federal Debt, they can have’em for free.

…yes I’m being humorous…but in reality…the breakup of the U.S. is not an impossibility so the breakup of Canada isn’t so ridiculous either.

just throwing it out there, before BC and the west coast of the U.S. slides into the Pacific because we are on the wrong side of the San Andreas Fault line.

#16 dekethegeek on 01.29.09 at 8:29 pm

I just wonder how our “internet savvy” generation of investors who cant wait 5 minutes in a lineup without becoming impatient will handle 2-4 YEARS of ‘down” in the markets.
I remember the 80″s and it was bad but it took Months to fall this far, not 90 days, and we still havent bottomed out yet.
The lack of patience(or experience) on the part of millions of consumers/investors under the age of 35 will make things much worse for the economy because they dont remember any real “bad times”.
A year or two seems like forever in the grand scheme but honestly, it aint. So try and pay the bills and keep your job whether it sucks or not because this will seem endless.
There is a light at the end of the tunnel. Its just a very LONG tunnel.

#17 dd on 01.29.09 at 8:48 pm

#8 eddy on 01.29.09 at 7:48 pm

“Realtors in there fifties sitting on multiple properties?? Well, a few months back we had the highest prices in history, that would have been the time to unload and take early retirement.”

Funny … sometime the people close to the action forget to look up.

#18 dd on 01.29.09 at 8:57 pm

#4 squidly77,

It is starting to sink in… 100 engineers were let go at Encana a couple of days ago. $45 oil and $4.5 gas will do it.

#19 David Halfkenny on 01.29.09 at 8:57 pm

I would not say paying down our debt by 47 b as pissing away our surplus. The Liberal leader is quite happy with the new budget. No one like a deficit. However, if we did not inject some money into the economy things would be a lot worst.

Everything in the world is not negative. This is a time to cheer up and show some optimism while we all work through this situation.

There will be other shops close and the results will show in the unemployment numbers. In the case of Giant Carpet means there were too many carpet stores in the country. These closings are normal during a ressession. If it was up to the NDP and the Bloc God only knows how high the deficit would have been under Dion colition.

I feel much better now. Thanks. — Garth

#20 David Bakody on 01.29.09 at 8:58 pm

I wonder if Mr. Harper is about to pull a George Bush move and re write the bankruptcy law? Not sure I mentioned it but that panel discussion I attended last week at St Mary’s University …. the said when we finally recover their is a good chance it will happen all over again but in a different manner ….. and as far as they were concerned “Greed is Good” for it produces profits big profits …. and profit is not a dirty word. So where do we go from here, not sure …. but start now and pay down debt, live within your means, invest wisely and save for a rainy day ….. look at both sides of the coin asking yourself, how safe am I if things go bad. But do not forget to live …. the simple things in life are sometimes the best …. I read once ” It is duty of husband to take his wife to places she can not got alone …. like a walk in park, in the woods, or a drive in the country … us your imagination. Then when you go to nice place to eat it has much more meaning, same with kids. Heck they are like a good pet, all they want is love and do really care what colour the walls are or how big the house is, but they do know love. ….. more later ….. here endeth the lesson ha ha. one last point before I go to bed …. think.

–Larry P. Aitken, CHIPPEWA

Where does all life come from? The Earth. Where does everything return to? The Earth. Where do values come them? The Earth. Many people are lost because they don’t know the importance of connection to the Earth. They connect to money, to relationships, to success, to goals. When we are disconnected from the Earth, we have feelings of being sad or lost. When we are connected to the Earth, we feel warm and secure.

#21 DVDA on 01.29.09 at 9:01 pm

Sorry bout that last one garth… I was drunk.

Can some one knowlegable comment on that fact that if the US goes into protectionist mode, can we not sell our products elsewhere?

#22 Cara on 01.29.09 at 9:04 pm

#7 – The story in MacKenzie is very sad.

I have a friend in Quesnel who has some friends in MacKenzie. The entire town is built around mills, and with the collapse of the lumber industry (relative to the real estate collapse in the US, and now Canada) the entire town has no employment prospects. The people can’t leave, because they can’t sell their homes. So the men have left, by the hundreds, to find work in the AB oilpatch. Which is now really slowing down. What is going to happen to these men, and towns like this?

This situation is heartbreaking, and there are many like it happening, and bound to happen.

#23 Flash on 01.29.09 at 9:21 pm

I just bowed out of a bidding war for a 5 bed condo in Guelph. Seems like there were dozens of viewings and 6 offers on a student property close to the university in just 4 days on the market. Does this mean that this type of real estate is now even more in favour during this down time in the general market? Flight to safety for investors fleeing the stock market maybe?

#24 cms on 01.29.09 at 9:23 pm

Growth… the sky’s the limit. Wait a second, that’s only 100km up. Well, never mind, consumers keep on consuming! Don’t look behind the curtain–you won’t like what you see.

“Lenin was certainly right, there is no more positive, or subtle or surer means of destroying the basis of society than to debauch the currency.
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of the citizens
The process engages all of the hidden forces of economics on the side of destruction, and does it in a manner that not one man in a million can diagnose.”
— John Maynard Keynes

#25 squidly77 on 01.29.09 at 9:24 pm

There is a light at the end of the tunnel. Its just a very LONG tunnel

thats not daylight that your seeing

#26 Marc on 01.29.09 at 9:26 pm

A more honest place sounds like some sort of Eden.

B.C. and Gordon Campbell in boom times developed balanced budget legislation. Now that playing pick up sticks with our butt cheeks is looking easier then balancing the budget, no problem for our government. Repeal the law, or exempt themselves from it. I liked the sound of the finance minister being penalized 20% of his/her pay if a deficit was run, but that idea was during the good times, things will be differnet now.

#27 john on 01.29.09 at 9:36 pm

Curiously a lot of people think they are immune to the coming depression? Mass production and mass demand have created every thing we take for granted from food,clothing,restaurants, etc to the television sets in our living rooms……….. when there is no demand for these products on a large scale…those massive plants,stores etc will be closing their doors—–our whole society is geared to demand when thats gone……………..? “After The Crash” is the best investment i ever made..thanks Garth. Im prepared for the very worst and anything less is a bonus.

#28 squidly77 on 01.29.09 at 9:50 pm

i first read this book in the eighties..

The upswing usually starts with an opportunity – new markets, new technologies or some dramatic political change – and investors looking for good returns.

· It proceeds through the euphoria of rising prices, particularly of assets, while an expansion of credit inflates the bubble.

· In the manic phase, investors scramble to get out of money and into illiquid things such as stocks, commodities, real estate or tulip bulbs: ‘a larger and larger group of people seeks to become rich without a real understanding of the processes involved’.

· Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is ‘distress’, which generates unexpected failures, followed by ‘revulsion’ or ‘discredit’.

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

weather prices are higher or lower they always always return to there historical mean

always have and always will..that small bit of knowlege will never let you down

Manias, Panics and Crashes

#29 john on 01.29.09 at 9:56 pm

22 Cara on 01.29.09 at 9:04 pm #7 – The story in MacKenzie is very sad.
How true Cara and its also happening in Ontario in some of our northern communities and has been for a couple of years now. No one seemed to notice… i don’t think money will buy us out of this mess (there isn’t enough in the government coffers) .

#30 EW on VI on 01.29.09 at 10:02 pm

22 Cara. Here on VI we have seen the forest industry fading for years. Mills at Youbou, Tahsis, Gold River and Now a large one at Campbell River all toast. Very frustrating when I can look out my window and see millions (yes millions) of trees in various stages of
growth. But you cannot bailout an industry when its markets are weak, the industry and workers must adapt.

There are bright spots. Harmac near Nanaimo just re-opened under a joint venture of investors, union and individual workers. Port Alice, an ancient pulp mill, re-opened after a lenghty shutdown.

The workers here are amazingly resilient. The industry as a whole is very proud and independent. No requests for bailouts (hear that auto sector?) but I believe there are some small incentives that have been offered.

And damn theres a lot of squirrels here…….

#31 squidly77 on 01.29.09 at 10:05 pm

encana was @ $96 USD a share in 2008 and its now @ $45 USD
is it a steal of a deal now ?
i say no..because it was @ $20 USD in 2004
it will be a good buy @ $24 USD;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

the TSX is still about 45-50% over valued and that is truly scary

it has a long long way to fall..

imo it will settle out @ about 5000

#32 anonymous on 01.29.09 at 10:10 pm


Edmonton home prices will be half price, three years from now. So will rental rates.

I can’t believe you pay $1500/mo for a 1-bedroom appt. That’s really pathetic. I’ve seen houses rent out for that price. Stop being so lazy and move your wife and baby into something cheaper.

You are forbidden from buying ANYTHING in Edmonton for at least 2 years.

#33 john on 01.29.09 at 10:10 pm

“Jobs will return, but in tens and dozens, after being lost in hundreds and thousands”…..i agree but i wonder …. our huge mass production factories will not be practical or cost efficient on a small scale ….are we going back to the small business,corner grocery, independent supplier from years ago??? it seems that our future could very well be in the past?….. As you stated Garth recovery will be slow on a small scale…..and it can be no other way. Wow worth thinking about.

#34 kc on 01.29.09 at 10:30 pm

#7 squidly77

Maybe you might want to state where and what is being done about this…

At first I thought you were talking about a plant in edmonton, however, the mill is in Mackenzie

VANCOUVER – “The B.C. government has declared an environmental emergency at a troubled pulp mill that was at an “imminent risk” of a chemical spill.

Just days after B.C. took over operation of the Worthington pulp mill, workers have been ordered to stay on the job for 15 days to prevent tanks containing 15 tons of deadly chlorine dioxide from rupturing.”
“The government has now stepped in and taken over operation of the mill, which has a $30-million to $50-million environmental liability.”

B.C. declares pulp mill ‘environmental emergency’
Gordon Hamilton, Vancouver Sun

now adding to your post,
“Now that the province is paying to keep the Mackenzie pulp mill warm — an effort to stop the mill from freezing and potentially releasing a cloud of deadly chlorine gas — a measure of safety has been brought to the community.
The future of the mill, however, remains less clear than ever.
The pulp mill was one of the last major plants to close in a wave of forest manufacturing shutdowns that has wiped out 1,200 high-paying, forest manufacturing jobs in the community of 4,500, located 175 kilometres north of Prince George.
The pulp mill had employed about 260 workers and supported hundreds more logging, trucking, supply and service jobs, but now a skeleton crew of 50 workers is all that remains at the plant.

This is one forestry town that is wiped off the map of B.C. 1200 JOBS in one town. Things getting bad?? naaa

now in your statement about the Govt not stepping in if this were a nuke plant… ummm some how I feel pretty strongly that any Govt will find the resources to protect from some thing they know about.

#35 anonymous on 01.29.09 at 10:30 pm


I’m long oil (under $40/brl) via DXO. It’s much less volitile than playing the stupid, overpriced oil services stocks. XOM is so overvalued, it’s not even funny.

While I caught a nice 40% move to the upside in C, I’m finished playing around with the “loser” banks. JPM will be a core holding that I will add to when it dips below $20.

#36 Another Albertan on 01.29.09 at 10:36 pm


The US consumer is the consumer of last resort. Period. All countries with a trade surplus with the US will suffer greatly.

From the Economist 12/20/08 – Merchandise Trade Balances (Latest 12 months, in US$ Billions)

US -853.1
Japan 64.8
China 278.8
Britain -182.6
France -82.7
Spain -153.9
Canada 52.2
Germany 283.3
Netherlands 60.0
Norway 82.5
Russia 194.6
Saudi Arabia 150.8
Brazil 26.1
Venezuela 50.2
Australia -9.0
India -109.6
South Korea -14.2

I’m not going to put in the full list, but you can clearly see the oil-exporting nations, the nations who export technology and goods and the nations that may be quite industrialized but need to import energy and goods. And, yes, Britain and France have trade deficits of that magnitude.

And forget about China’s burgeoning middle-class picking up the slack… their consumption is something on the order of 1/7th the size it would need to be to make up for the loss of consumption in the US. Without the US consumer buying, the velocity of money circulating around the world slows nearly to a halt.

#37 Keith in Calgary on 01.29.09 at 10:39 pm

#1 Jace…..

With a 25 year amortization, the $220K mortgage you are planning on starting out with will have a balance of $209K in 2 years time. Property values will drop way more than the $11K of perceived equity you will have built up…….and even you agree that these values may drop by another 10 -20% ($27 – $54K)……..

Over that period you will have made about $40K of mortgage payments, taxes, utilities and insurance payments, as well as condo fees, if any.

Yet by renting a bigger 2 bedroom place you may only pay $30K of rent over the same period.

It’s a break even scenario because of the perceived equity you may build up, but with significantly greater personal financial risk if you buy, due to continued depreciation in the real estate market. It isn’t worth it right now……if we had a stable 5 years of RE values behind us I’d say go ahead and buy.

Keep renting.

#38 Van MD on 01.29.09 at 10:47 pm

Got the signed copy of After The Crash in the mail today! Look forward to reading it this weekend!

#39 Third Chimp on 01.29.09 at 10:52 pm

The worst thing that could happen is that the various stimulus plans work, and the entire first world goes back to driving its consumer binge machine headlong into any one of a number of walls (Or maybe that’s what just happened ?) Not that there’s actually any danger of these plans working.
“The current crisis looks precisely like “the perfect storm. ….This is the collapse of the existing financial system. It is the result of poor quality regulation. And as a result of this, huge risks were overlooked.”
And who said this ? Vladimir Putin, this week at Davos. A guy who just might have access to reasonably expert opinion about the global situation. Doesn’t sound like someone who expects his RRSP to take flight again anytime soon. You shouldn’t either.

#40 dd on 01.29.09 at 10:52 pm

32 anonymous

“I can’t believe you pay $1500/mo for a 1-bedroom appt.”

It cost $1500 for a 2 bed and 2 bath in downtown Calgary. With all the layoffs rents will come down.

#41 dd on 01.29.09 at 10:54 pm

31 squidly77

” encana was @ $96 USD a share in 2008 and its now @ $45 USD
is it a steal of a deal now ?”

If you have time and think gas will go about $8.50 then it might be a steal.

#42 wayupnorth on 01.29.09 at 10:57 pm

Has anyone considered that we are at the end of a giant monopoly game? One person (a hundred or so corporations) has most of the properties on the board and the rest of us just pay till we go bankrupt. The only way to end it is to quit the old game and start again.

Nothing will improve until all the big corporations fail or are broken up into smaller companies that will become aggressive for growth again rather than just producing profits at any cost.

Any government that props up establshed companies is wasting their money. We need to help new companies or tiny ones start to grow and compete (a word that has disappeard from our vocabulary) with each other and with outside companies in the same business. Obama through his actions has already declared free trade dead we would be fools to hold onto the concept and need to start changing our tax laws etc. to make products made in this country as well as food grown here competative with anything else. Then a new old word re-enters our vocabulary called quality which is what businesses competed on 50 years ago but is now ignored in the crazy rush for lower prices.

#43 Future Expatriate on 01.29.09 at 10:57 pm

Unfortunately, the world cannot become a more honest place until a certain offense contractor masquerading as the “shining light of democracy” blows itself up first.

Which it is doing right now, economically speaking.

#44 dd on 01.29.09 at 11:03 pm

The last 10 years people (US, Canda, UK, Europe, Aust) have been spending borrowed money. Instead of spending $1.10 or $1.25 per $1.00 of income now people are spending $0.90 to $0.96 for every $1.00 of income. Yes people are starting to save now.

The contraction is going to hurt but it has to be done. Nobody is willing to hold the debt of the over spenders anymore.

#45 dd on 01.29.09 at 11:05 pm

Imperial cranks up capital plans … G&M.

If imperial gets this right they will be the biggest O&G company in 10 years.

#46 prairiegopher on 01.29.09 at 11:41 pm

#18 dd

“It is starting to sink in… 100 engineers were let go at Encana a couple of days ago. $45 oil and $4.5 gas will do it”

dd where did you hear this?? My son works for Encana and knows nothing of this.

#47 Anon on 01.29.09 at 11:50 pm

#19 David Halfkenny

“In the case of Giant Carpet means there were too many carpet stores in the country.”

You make it sound like Southern Ontario is wall-to-wall (no pun intended) with carpet shops. Subway are opening another 600 outlets in the UK, does this mean there aren’t enough sandwich shops in England? I suggest that many struggling mortgage-holders have decided to make do with their existing floors, hence the demise of Giant Carpet. Meanwhile, “small-ticket” business like cheap fast food are doing better than the average.

If that’s good news, I’ll have a big mac and fries, please!

#48 The Tallyman on 01.30.09 at 12:06 am

#15 North Vancouver Citizen said
“In an earlier post I predicted the U.S. will liberate Cuba”

More like Cuba should be liberating the US citizens from their tyrannical Govt.
That’s all the world needs… the USA invading another
country to keep the Wall St crowd in bling.

#49 barb the proofreader on 01.30.09 at 12:24 am

#20 David Bakody, re: Larry P. Aitken, CHIPPEWA “When we are disconnected from the Earth, we have feelings of being sad or lost. When we are connected to the Earth, we feel warm and secure”
David, great quote ..there’s a lot of truth to it — we alleviate the fear and feel good when we can satisfy our basic need — safety. We can almost control our little plot of earth — but we’re uncomfortable when all our eggs are in someone else’s basket.

#50 LuckyLondoner on 01.30.09 at 12:24 am


Love the blog and I have learned a great deal form both you and many of your frequent posters (also now like Mish’s blog too).

Am becoming more and more convinced though that you are on the wrong side when it comes to the Anthropogenic Climate Change debate (natural Climate Change has been around for billions of years).

More and more creditable and honest scientists are moving into the skeptic camp and many of these were on the IPCC (the tobacco and oil company pay-off argument really insults my intelligence):

Great debunking by an esteemed Canadian scientist at:

And lots of current coverage of the strength of the skeptical position is at:

Please keep an open mind on this issue!

#51 The Tallyman on 01.30.09 at 12:35 am

#16 said
” There is a light at the end of the tunnel. Its just a very LONG tunnel”

#25squidly77 replied “thats not daylight that your seeing”

And that’s the problem.
Is it a train?
By the kings bandaiding the problems we just don’t know what kind of humpty dumpty we’ll eventually face.

If you were informed everyday that somebody was on their way over to kick your ass… you might worry and wonder and eventually make yourself sick just wondering what you’d be battling.

I believe a lot of people are plain worn out shadow boxing the unknown.
I find myself slipping into that category at times.

World govts have to let chips fall and trust that the people have what it takes to pull thru as they always have.
They must stop delaying the way back to health by forcing cod liver oil down our throats.
Will there be any fight left in people by the time
the real payment is due?
(end of rant)

#52 TJMikey on 01.30.09 at 12:35 am

We managed sell our house just as the market here in Calgary was coming down from the peak. We were a little late but got it done.

We moved into a 1 year lease rental, about 3 months left . ai’m thinking that the Calgary market is going to correct ANOTHER 40% over the next 18 to 24 months. I don’t see anything on the horizon to stop it.

If we are still in Calgary I see us renting and riding it out, then jumping back in about 2 years from now.

This is going to be ugly, I was on the front lines through the early 80’s…..this is worse.

#53 john on 01.30.09 at 12:39 am

I’m still buying real estate in Vancouver because Vancouver real estate never goes down. It’s a proven fact that you can always make money in real estate! The stock market has crashed but I still have my condos.

#54 Apocalypse Now on 01.30.09 at 12:54 am

GARTH WROTE: Regulators are realizing how much they screwed up. Bankers are waking up to the crisis their lax lending policies caused.

Regulators did not screw up; they did exactly what they are paid to do which is NOTHING; like cops on the take they are experts at looking the other way.

Bankers are waking up…Garth I love your sense of humor. If someone paid me handsomely to lose a few billion dollars and then gave me a few billion more to cover my losses with no expectation of repayment, why would I want to wake up??? Knowing that Uncle Sam and Her Majesty are ready and willing to bail my sorry ass no matter how much I lose (read rip off), what possible lesson could I learn, better still why the heck do I need to learn any lesson? Bankers will be bankers, a leopard cannot change its spots so let’s forgo the wishful thinking that they are waking up. They were never asleep to begin with; they knew exactly what they were doing. Even as they know exactly what they are doing today by tightening the credit screws. It is called redistribution of wealth. Take from the middle class, give a little bit to the poor and the rest to the ultra wealthy – a few billions is no longer enough for them; let’s give them TREEEEELLIONS!

If this sorry fiasco of a financial crisis proves anything it proves beyond a shadow of a doubt that governments do not regulate banks; banks regulate governments. If anyone should be waking up it should be the average Joe who should realize once and for all that government is no longer for the people or by the people; it is for the ultra wealthy who are the puppet masters pulling the strings of the puppets they put in power. If you are lucky you may get a few crumbs from the masters’ table. Even crumbs these days seem to be hard to come by!

#55 Denver-Calgary on 01.30.09 at 12:55 am

#1 Jace – I agree with other responses to your question.

DO NOT buy anything for next 2 years minimum. Rent a house for $1500/month while everyone on your block pays mortgages twice that price. We have been doing that for the past two years in the US and are still paying about $1000 – $1200 less than the mortgages next door to us.

#56 Dave on 01.30.09 at 1:08 am

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.


some of you people like repeating history but continously stop telling the story at the most gloomy point. After all these tremendous bear markets, a major bull market followed. Some of you develop this comfort and get sucked into this depressive state. I bet you were patting yourselves on the back the past couple of years for how smart you were in the real estate market

It doesn’t seem like any of you have any sense of optimism. I suggest you read some Gustave Le Bon, Charles Mackay, Humphrey Neill….A lot of you behave EXACTLY how these genius’ described the mass mind during mania’s.

How suprised will you be if out of nowhere there was some sort of bull market that emerged? You are all too sure that everything will be horrible for the next few years. You sound exactly like the people that told us all in the past few years that “you can’t lose in real estate!!!”

#57 Dave on 01.30.09 at 1:18 am

one last point. Just as the masses told us you can’t lose in real estate the past few years, the masses are telling us things will be horrible for the next few years in all markets. The saying is “the public is correct during the trends, but wrong at both ends”.

All this extreme pessimism is a sign that we’re hitting a bottom (stock market bottom, definitely not real estate bottom). Everyone that was scared, has been scared out of the market.

Be concerned when everyone’s calm, but be calm when everyone’s concerned. A bull market will emerge before you know it. Those of you who anticipated the real estate bottom, congrats to you, but you’re letting your guard down. It was your foresight and going against the grain at all odds that put you in that great position. Why are you losing sight of that now?

#58 Mini-Garth on 01.30.09 at 2:00 am

If you believe in peak-oil theory, which I do, then once the global credit crunch/recession is over, oil prices should shoot right back up…

And with it Alberta should boom again…

And Alberta home prices should go right back up.

The gov’t will have lots of oil money again…

#59 DumpNowOrRegretLater on 01.30.09 at 2:38 am

Is this what’s to come?…

#60 kc on 01.30.09 at 2:42 am

Who do you trust… IMF or the screws in the big chair in ottawa??

IMF paints darker picture for Canada

The International Monetary Fund is forecasting the recession in Canada this year will be much deeper than this week’s federal budget is projecting and the recovery next year a lot weaker than projected by either the government or Bank of Canada.

#61 Mike (authentic) on 01.30.09 at 2:42 am

People (in general) need to brush up on what a Recession really is, what is means and how it affects employment/spending/living standards. Learn from history to prepare for the future.

It’s all happend before in the early 80’s (1982) when gold was $850 an ounce (then dropping to $285 in 2000 18 years later; you can see how gold is a bubble today*). The last time a Depression happend was 1929 and things didn’t get better till 1949-1966. History suggests this is a depression cycle we are in and would last (on average) 8 years. The market peeked Thursday, October 11, 2007 @ 14279.96. So historically, things should stop getting worse around 2014-2015.

Can we wait that long? The instant gratification lifestyle won’t like it. Heck, I don’t want to wait that long myself!

But my best guess on historical data would be 2014 when we see the light at the end of the tunnel.


* Gold is not always a safe bet! On March 5th, 1933 pres Roosevelt embargoed (10 year imprisonment) owning more than $10,000 in gold (due to people hording it) and set the “new value” of gold to just $35. You had to sell anything above that back at just $35.

#62 TS on 01.30.09 at 2:59 am

Since economic downturns generally increase the number of students in colleges and universities, rental properties targeted at students probably are reasonable investments as long as you have enough cash down and the rents give you a solid cash flow.

House prices are in decline in virtually every region of the country, and there’s not much one can do except exit the real estate market now if you can’t afford the home you’re in, then rent for a couple of years to conserve your capital and re-enter when homes are at a more affordable level.

For older folks who may be mortgage free it comes down to the monthly cost to keep a roof over your head. Our ‘all-in’ costs to stay in our home (heating, hydro, water, taxes) are less than $600 a month….quite a bit less than a 2 bedroom apartment would cost in rent. So, in terms of keeping a roof over our heads, we see little benefit downsizing and incurring all of the costs to move into something else. Especially since it may end up costing us more in heat etc. (we have invested in a super high efficiency furnace with a D/C motor, new windows, doors etc.).

We had always planned that the family home would be left to the kids as part of their inheritance, and we never considered the equity in the home as something we would need for our retirement funding.

Every situation is a little different for people but one key factor applies to everyone: maintaining positive cash flow. The only thing that really matters in times of economic downturns is how much surplus cash you have above your living expenses at the end of every month.

If you are in a deficit position or just breaking even in terms of your cash flow…you need to act now. Don’t let your ego stand in the way of making prudent financial decisions. The only good debt is the one you don’t have.

#63 Ed79 on 01.30.09 at 4:40 am

#13 dd
“Rental rates will drop.”

Hi dd and others. Have seen very little discussion about this, but why will rental rates drop? I get the feeling that there’s something really obvious about this that I’m just not seeing.

Seems like an area governed almost entirely by supply and demand (free of speculation). I’m guessing with prices falling and properties not selling less people are moving from renting to owning. At the same time people unable to sustain their mortgage and being foreclosed on or, if lucky, selling are renting. Is supply increasing out of proportion to this? I’ve read that renting is becoming cheaper in the US.

Opinions? Analysis? Historical perspectives?

#64 Ben on 01.30.09 at 7:02 am

Jace, I don’t think you have run the whole equation. Renting at $1500 for 2 years is not the same as losing 15% on the house value. With the house, look at monthly interest cost on the mortgage, property tax, far higher utility bill, cost of trying to furnish the larger space, all the things required for home ownership (mowers, garden hose, furnace filters, painting, etc). Run a serious calculation on this. You’ll probably find that the money out the window is pretty similar. And the total amount of money required to finance the house lifestyle will be at least 20-30% higher, very rough unscientific estimate. There are also some significant closing costs associated with buying a new house.
House prices have farther to fall, maybe 15-20%. Your best bet is to try to find a 2-bed apartment for the same you are paying now, see if your job is still secure in 12 months, and start looking then. With a baby on the way, more space is not the only consideration. You need to make sure you don’t overextend your family finances – you will be quite happy in a 2-bed apartment.

#65 Kash is King on 01.30.09 at 7:59 am

Euro Trash?

Gold and USD up, Euro weak.

#66 buy gold on 01.30.09 at 8:18 am

Garth, I have own a rental property in the GTA since 2005 i have great tenants should i sell it or keep it? my tenants want to stay for a while?

If you are in positive cash flow, why not? — Garth

#67 David on 01.30.09 at 8:40 am

Hard to find it in me to feel much sympathy for the worried realtors. Selling overpriced and oversized McMansions to people with zero equity is the proximate cause of the financial whirlwind all of us are now reaping, so they hardly qualify for worthy victim status.
A return to the happy times of real estate of 2007 are unlikely. Once this nasty deflationary cycle has ended, it will still be tough to borrow money from banks and when those 5 year mortgages have to reset at much higher interest rates there will be an epidemic of zombie mortgages defaulting in 2012 driving home prices lower.
Real estate has about the same chances of recovery as 17th century Dutch tulip bulbs or all those flaky dot bomb companies with no record of earnings or dividends at the millennium. None.

#68 sail1 on 01.30.09 at 8:49 am

Hey Garth do you think ,maybe McGuinty read After the Crash?

“I have to be up front with Ontarians — we cannot pursue the pace of new investment dollars on a go-forward basis, in the way we have in the past,” McGuinty said.

“Our economy won’t support that, our revenues are not there to support that. That would only drive us into an ever increasing deficit and that’s not something that I’m prepared to accept.

#69 North Vancouver Citizen on 01.30.09 at 9:05 am

A “Black Swan” World Event coming to a neighbourhood near you.

…You heard it here first…

#70 North Vancouver Citizen on 01.30.09 at 9:09 am

Global Crisis Destroys 40% of World Wealth; Bailout to Hit $4 Trillion

“”Steve Schwarzman, chairman of private equity giant Blackstone, said an “almost incomprehensible” amount of cash had evaporated since the financial crisis took hold.””

“Business will be very different,”

#71 Dr. Doom and Gloom on 01.30.09 at 9:23 am

Garth Said: “Between now and then it gets worse. But maybe when we get there, the world will be a more honest place.”

This struck a note with me because it reminds me of a guy who’s life work was to interpret the Mayan Calendar. He posited that everyone misinterprets it – what it really stands for is the coming of ‘ages’.

Here’s the start of 18 videos in which he explains it all (

His theory is that in the next couple of years (between now and 2012 – the date some crazies predict as the end of the world), will come a new age of “ETHICS”. An age where the cheating, lying, violence etc. come to a screeching halt. The theory also posits that there are very turbulent times before the new age shifts over (he can explain it better than me – watch the videos).

I’ve often heard my generation of people (the new up and comers in the career workforce (25-35)) are lazy, un-motivated etc.. I don’t think it’s that we’re those things, we just see the bigger picture now. Our parent’s generation (the baby boomers) only say one dimension of life (grow up, have a family, work, retire, die). I can honestly say I know very few people who hang onto that mentality in my age group. Most people now want to work as little as possible, because in the end it is all freaking pointless anyway. Make enough to live comfortably, and spend the rest of your time enjoying your life with friends and family.

Maybe it is a new age dawning, and maybe the baby boomer’s kids will be the harbingers ??

#72 Has on 01.30.09 at 9:29 am

#41 wayupnorth

Well said, sir

#73 Bill-Miskoka (N.A.M.) on 01.30.09 at 9:35 am

Oh goodness, another Big Box Retailer bites the dust. What a sham, yes SHAM!

They produce nothing but low wage jobs selling products made elsewhere. Just another Home Depot selling low quality, overpriced crap.

Listen up folks, here is how it works. The manufacturer MAKES the product, sells it through a DISTRIBUTOR, who then sells it to you through a retailer. Each and everyone of them adds costs to YOU. The last in line is YOU.

These stores became popular mostly because it reduced the costs to the manufacturers and distributors. They ran the long established companies out of business, and made the market a place new business could not compete because they had the goods locked under contract.

So, who’s your Daddy? Baaaaaaaaaaaaaaaaaaaaa!

#74 smwhite on 01.30.09 at 9:57 am

#21 DVDA

Yes, we can sell to countries that have money that will actually be worth something…

#75 rory on 01.30.09 at 9:58 am

“Why even so-called ‘safe’ recession investments like cash, money-market funds and Treasuries can demolish your portfolio”

Saw the above quote from someone trying to sell me a subscription but I don’t get it …everyone says cash is king yet we talk about banks and business failing and governments printing and spending money …should we not all be in stocks as we might actually own something in the end.

Can someone shed some light on this ( not tunnel light)?

#76 smwhite on 01.30.09 at 10:01 am

#25 squidly77

You keep making comments like that your going to have to have your own little stand up act… Priceless!

#77 Bill-Muskoka (N.A.M.) on 01.30.09 at 10:01 am

‘Go forward’? What exactly does that mean? They all use the latest BULLSHIT terminology like a pet shop of parrots, but do they actually say anything? NO!

The English language has been riddled with meaningless jargon, and people do not even bother to think what it means.

#78 Tony on 01.30.09 at 10:12 am

#55 Dave
#56 Dave

Finally a ray of light. Thank you Dave! Your two posts hold a lot of wisdom.

I’m glad to see that I’m not the only one who noticed that Doom & Gloom have found a home here. A lot of (young) people who comment on this blog are really overjoyed to see real estate tanking in value – so that they can eventually buy a house. I don’t care how cheap house become, they’re still going to need a job and and the willingness to move out of their mom’s basement. One thing is for sure, they got a fire going here, and Garth shows up every once in a while witha gallon of gasoline – to help put it out.

I check into this blog from time to time to read what Garth has got to say about our current state of affairs. I have valued his opinion and candour for many years. From time to time, his lust to sell books gets in the way of his common sense – but then that’s when I have my fun (hoofing him in the ass as he’s bent over in a gutter trying to dig out some poor squirrel’s buried acorn).

It’s interesting though, when you see Garth on mainstream media – he’s much more well behaved and actually appears to be sensible. That’s because he knows the adults are watching.

By the way, today’s post was balanced and thoughtful, thank you.

#79 smwhite on 01.30.09 at 10:14 am

USA goes whoring around without a condom, gets the clap, and then proceeds to infect all its boyfriends in the G8…

Obama is doing his best to work that decoupling argument. What do you think will happen to Japan and China whom are holding 1 trillion in US debt if the USA locks them out? Will this pop the US bond bubble?


Funny looks on all these people’s(Canadians) faces that were so “Pro-bama”; starting to see that he’s not all sugar and spice. Be careful what you wish for you left leaning knobs…

I for one have changed my tune about the deflation/inflation debate, sort off. Here’s why…

As this plays out I’m wondering if some of the more commodity based countries could get some “hidden” deflation based on their currency’s rise against the US dollar. This is what protected Canada against $140 a barrel oil. As oil moved up in price the cost to the Canadian consumer actually went down. When I do more reading and sit and ponder with my jug-o-crown-royal, we really have had some deflation during the Canadian dollars run. Thoughts?

I am totally 100% on the depression for the USA and recession for the world train. Choo choo!

#80 Future Expatriate on 01.30.09 at 10:14 am

Mini-Garth #57… oil is not going to be going up for a very long time, peak oil or not. Alberta is doomed.

When the Mideast saw T. Boone Pickens and the mass move away from oil, they panicked. Just like after the gas crunch “crisis” of the 70’s, they lowered the price of their brand of heroin (addictive oil) to try one last attempt at suckering a weary gouged populace into one last orgy of new Hummers and SUV’s and Madrassahs.

Oil is going to remain low for a very, very long time. In fact, because of the old saying “Fool me once, shame on you; fool me twice, shame on me”, oil may well stay ridiculously cheap until it will only be used for plastics.

The future is xurbia with windmills in every yard and solar panels on every roof. And sustainable wood furniture from plantations. Not oil.

Never again.

#81 dd on 01.30.09 at 10:17 am

#61 Ed79

“Rental rates will drop.”

“Hi dd and others. Have seen very little discussion about this, but why will rental rates drop? ”

More unemployeed people = less money in economy
Over supply of housing = less money to buy and rent

#82 wjp on 01.30.09 at 10:31 am

If you have a 7 year time frame, now is not the time to sell equities. If you need the funds tomorrow, by all means…it will go lower but when the turn comes, it may pass you by so quick, you can’t react in time. Good time for dollar cost averaging in the market and with 10 plus years to retirement, you will be pleased indeed.
Real estate is a different gamble, if you are mortgage free like we are, no real point in selling as we intend to die in this small but comfortable home. However, if you are mortgaged up the ying yang, yesterday is the time to sell. The U.S. reversal of fotune may or may not be good for Canada. If it is achieved by shutting out our imports, then we may be really in the soup. Inflation long term could be the worst of all possible secenios, watch the price of platinum, when you see it rising, be aware inflation is not far away.
Just some thoughts on the economy…opinion only!

#83 wjp on 01.30.09 at 10:32 am

Sorry our exports…their imprts from Canada

#84 wjp on 01.30.09 at 10:43 am

Just one more thing, those in the know would be discounting a U.S. protectionist movement in the stimulus legislation, meaning they don’t think it could happen. The Canadian Dollar would be at .62 cents within hours and at the moment it is at .8080…only down 95 points on the day…

#85 anonymous on 01.30.09 at 10:50 am

#61 Ed79,

It seems pretty obvious to me, but then again I have a time-machine and a robot-brain. I’ll try to use small words so you can follow:

1. Home prices drop. Buyers disappear.

2. Rent will come down because people who are trying to sell their overpriced condos will try to rent them out, instead. They are trying to wait out the housing mess.

3. This puts pressure on existing rental units out there driving prices down.

4. And the cycle continues.

It’s the optimism that kills the market price.

#86 Sig on 01.30.09 at 10:57 am

Hi Garth
Love your blog. I work for the govn’t, so my job is secure and our mortgage on our house is low and will be paid off in five years. I was hoping to purchase a cottage. Should we wait till next year? I’ve noticed assessment values are alot lower than what the sellers are asking for thier cottages. Any advice?

#87 jess on 01.30.09 at 10:59 am

greed out ethics in?

OSLO — — Norway’s oil fund has blacklisted Canadian mining company Barrick Gold Corp. [ABX-T] and U.S. conglomerate Textron Inc. [TXT-N] over concerns that their operations violate the fund’s ethnical guidelines, the government said Friday…
ethical standards set for the fund. Companies can be excluded for concerns about producing weapons, such as nuclear arms and anti-personnel mines, environmental damage, human rights violations and other issues.” globe and mail

#88 sail1 on 01.30.09 at 11:04 am

According to Canadian home builders we live on another planet.

Housing market not collapsing: builders

Cooling, Not Melting

Eric Beauchesne, Canwest News Service Published: Tuesday, January 06, 2009

OTTAWA – The Canadian housing market is cooling but is not facing a U. S. style meltdown, builders here say.

“A few commentators have drawn a parallel between the Canadian housing situation and the extreme difficulties in the housing market in the United States,” the Canadian Home Builders’ Association said in a report yesterday that dismisses such comparisons.

“There is absolutely no merit in drawing such a parallel,” the construction lobby said in a report that contends the pace of housing construction in Canada is merely returning to a level that is consistent with underlying housing requirements following the boom of recent years.

“The housing situation in Canada is totally different from that of the U. S.,” it said. “There will be some price moderation in some markets, but there is nothing to suggest that housing markets in Canada are vulnerable to the oversupplies and plunging prices that characterize many markets in the U. S.

“We did not experience the same housing boom conditions that occurred in the U. S., and there is no reason to expect that we are in for the serious pain they are currently suffering,” it said.

To support its argument that the Canadian housing market is not going the way of the U. S. market, it cited a variety of differences:

-Unlike in the U. S., underwriting standards for qualifying mortgage borrowers in Canada have been maintained at prudent levels resulting in mortgage borrowers here being much more creditworthy.

-Canadian mortgage lenders never offered low initial ‘teaser’ rate mortgages that led to most of the difficulties for mortgage borrowers in the United States.

-Most mortgages in Canada are held by their original lender, not packaged and sold to third parties as is typical in the United States, and consequently, Canadian mortgage lenders have a vested interest in ensuring that their mortgage borrowers are creditworthy and not likely to default.

#89 Patrice on 01.30.09 at 11:17 am

RE is just fine.

Garth; your whole blog has now been debunked.

plenty of bidding wars and multiple offers; proving that it was just a small hiccup in the ever rising RE market.

ps: yeah i’m being sarcastic.

#90 GFP on 01.30.09 at 11:32 am

Just leased a nice house- totally renovated in the inner city in Calgary for $1550 month. New everything, kitchen, granite, heated floors, jetted tub, new big deck, huge yard for our dog, huge double garage. I figured out we are saving AT LEAST $1300 month over what it would cost to own it, not including what it cost the current owners to renovate it, also not including the 20% down we would have had to put to avoid cmhc BS fees. Also not including what we would lose due to depreciation over the term of the lease- 1 year.

Also, new tenancy laws in Alberta state you can break the lease with only 1 month notice, while the owner needs 3 months! haha Its not even worth it to be a landlord now. If we see something nice with way cheaper rent 6 -8 months from now when things are supposed to get worse, we will be calling our LL to renegotiate the rent or we will leave in 30 days.

Life is good. This may get bad people, but life is still so much fun. Time to forget this blog for a few days and hit the slopes! Garth- loving the book.

#91 smwhite on 01.30.09 at 11:33 am

#61 Ed79

With (housing/shelter) supply up, speculators( as with the dead, divorced and transferred) will be competing for others for sales, in this environment the pressure is downward, they won’t unload these and will have to attempt to rent to at least get some return on investment, more competition for rentals creates more downward pressure on rents…

Add to the mix one billion in social housing…

#92 a on 01.30.09 at 11:40 am

Don’t believe we are GOING INTO A DEPRESSION? This will Convince you.

#93 jess on 01.30.09 at 11:49 am

Litigation Release No. 20873 / January 28, 2009
Securities and Exchange Commission v. Gordon B. Grigg and ProTrust Management, Inc., et al., Civil Action No. Civil Action No. 3 09 0087 (January 28, 2009) (MDTN)
SEC Seeks Temporary Restraining Order and Asset Freeze to Halt Ongoing Fraudulent Offering Involving the Troubled Asset Relief Program.

#94 TheWhiteKnight on 01.30.09 at 12:03 pm

I just wanted to mention that yours truly purchased a brand new car yesterday that was assembled in Woodstock, ON.

Maybe you will do the same and buy one that is assembled in Oakville or Oshawa or Cambridge or anywhere in Canada for that matter.

#95 Flip on 01.30.09 at 12:04 pm

About the $1350 “renovations” credit:
Sherry Cooper from BMO publishes:

“The tax measures are quite moderate, including a tax credit for home renovations, which might simply bring the underground GST evaders above ground. Clearly, households with little job security won’t be enticed to renovate for a 15% tax credit. The adjustment in income tax tranches will save individual taxpayers a maximum of $317 for high-income filers, and far less for low- and middle-income households.”

I am not sure if she got this thing right… but talk about bad press if it is the case…

#96 rory on 01.30.09 at 12:23 pm

I have lived in Van and the Okanagan but even this floored me …good concept buy yikes …notice the word ‘market’.

#97 FP on 01.30.09 at 1:14 pm

Did anyone see this article in the G&M today?

An outburst of action in an idle market
Detached house in Toronto listed for $559,000, sells for $611,000 in January

After a dismal fall stretched into a bleak December in Toronto’s housing market, many agents were nervous about what January might bring.

But, while the market continues to be sluggish in some areas, a few bidding skirmishes popped up in the opening weeks of 2009, agents and homeowners report.


So what’s going on? Are there a lot of buyers on the sidelines waiting to get into the spring market? Is this going to signal a rebound in Toronto’s resale market? Did we touch the bottom last fall/winter? Any thoughts/comments?

#98 Darryl on 01.30.09 at 1:28 pm

I live in Mississauga and I see that city hall does not get it at all. Reading the Mississauga news I see that the Mayor intends on speding 40 million to renovate the front entrance to city hall. So much for the wisdom of Hazel . “If you are not tingling all over, you are not alive”Ward 7 councillor Nando Iannicca said after the presentation by the architect. What the frac???? . Last year we were told that our taxes would rise significantly over the next few years to pay for upkeep of older infastructure in need of repair. Now my taxes will go up further so that Nando can tingle? Like I said , These guy’s just do not get it.

#99 confused and a little crazed on 01.30.09 at 1:46 pm

hi 52 # john,

Good luck to u. I ‘m sorry I can’t email an attachment here but I downloaded an analysis from a urban econ professor from UBC who has examined the last 3 boom / busts and the worst was the 80’s. Some say this one we are currently in is worst but we won’t know until it’s over.

however, the 80’s downturn took 4 years to reach bottom and another 5 to get pack to its peak. That is quite easily 10 years and with more and more condos finishing up post/ pre 2010. there will be more supply definitely. with 2010 olympiics we will be paying more tax for sure 10 % …8.9 in property tax…it goes on and on.

Genome Canada made harsh cuts to research….less techs, less investments…more people leave for work elsewhere. regardless of the place…no work …too expensive to live…they have to leave. And we are all waiting for the interest rate hike sooner or later 800 Billion plus Stim plan for US and 64 Billion for Can…do u really think these rates will last forever.

we do not have a dominating industry player here …no microssoft…no kraaft foods…no General electric just little electronic arts. there stock priice half this year

though big in bc, little in Global market small player compared to Sony and Apple.
Do a little research ..go to the library…ubc library is open. check it out for yourself

#100 [email protected] on 01.30.09 at 1:55 pm

The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office.

#101 Mike B formerly just Mike on 01.30.09 at 2:36 pm

FP 97…. Downtown properties are usually picked up by first timers and well… they tend to be a bit eager.. They think anything south of Bloor is just COOL… Plus.. they figure with all this free money going around with low interest rates they might as well buy. Too bad no one explained to them that in a few short years those “teaser” rates will go up and they will have a big mortgage, no job AND have to pay higher interest rates on the mortgage.
Of course the other side of this story is SPIN.. Realtors will see a trend in anything. It still astounds me that they actually feel that the market DOES ALWAYS go UP.
NEVER DOWN . Soothsayers they are!!

#102 POL-CAN on 01.30.09 at 2:42 pm

Just a thought on the great depression…

In Ontario the unemployment rate peaked at 45 %

Keep in mind that back then the 2 income family was not the norm. If one factors that in and then adds kids and seniors it is easy to surmise that only approx. 25 % of the population had an income…..

Not saying that it will get that bad this time….

But it could. Could even be worse….

#103 David Halfkenny on 01.30.09 at 2:51 pm

Mr Turner, I read your blogs as they do provide some very valuable information for people to make measured decisions. I prefer these to the political comments as they are educational.

#47 Anon

In response to your comments it is based on a common term called supply and demand. In this case the demand is not there. If all the carpet stores closed would be cause for concern. The carpet businesses that have managed their books in a positive light will fill the void. I feel sorry for the workers who have lost their jobs but this does happen in life. Using an Obama term. “We have to pick ourselves up and dust ourselves off. Let hope the safety net is there to tie them over until the next opportunity opens up.

#104 Mike (authentic) on 01.30.09 at 2:54 pm

#90 – GFP on 01.30.09 at 11:32 am Just leased a nice house- totally renovated in the inner city in Calgary for $1550 month. New everything, kitchen, granite, heated floors, jetted tub, new big deck, huge yard for our dog, huge double garage”

In October our rent for a Inner city SW house was $3,000 a month in October. Where did you find such a good deal?


#105 Mike (authentic) on 01.30.09 at 3:05 pm

#71 – Dr. Doom and Gloom on 01.30.09 at 9:23 am

I’ve often heard my generation of people (the new up and comers in the career workforce (25-35)) are lazy, un-motivated etc.. I don’t think it’s that we’re those things, we just see the bigger picture now. Our parent’s generation (the baby boomers) only say one dimension of life (grow up, have a family, work, retire, die). I can honestly say I know very few people who hang onto that mentality in my age group. Most people now want to work as little as possible, because in the end it is all freaking pointless anyway. Make enough to live comfortably, and spend the rest of your time enjoying your life with friends and family.”

Speaking on the GenX generation which is between you and the Baby Boomers, you NEED BOTH aspects, you can’t opt for an easy, lazy, instant gratification life because someone has to work to pay for it. Sorry to wake you up, but, grow up, have a family, work, retire, die is the way it’s done, although you order is out of wack. It’s childhood, schooling, grow up, work, pay taxes, have a family, retire, live easy, die. You can’t put live easy and retire before work and paying taxes.


#106 greyhound on 01.30.09 at 3:09 pm

re #90 GFP…

You are a bit off on your statements re. Alberta Tenancy Act. If you are in a 1 year lease in Alberta, you are NOT able to break that lease with 1 month notice – you are obligated by contract to the 1 year term. The changes you described only related to month-to-month leases – not 1 year terms like the one you are in.

But I agree with your approach – I am doing the exact same thing here in Calgary – and with the way things are going there will be no need to get out of your lease early anyways…

#107 Amy Clowater on 01.30.09 at 3:13 pm

I just had such a laugh. As I was reading Garth’s daily thoughts, in the background I hear Jim Flaherty say “No one any had idea it would be this bad!”… I had to laugh, what are you talking about?! Garth DID and you chose not to listen and now you are blatenly lying to the Canadian people. Shame on you Jim and Shame on you Stephen Harper!!

#108 john on 01.30.09 at 3:16 pm

#53 john on 01.30.09 at 12:39 am I’m still buying real estate in Vancouver because Vancouver real estate never goes down. It’s a proven fact that you can always make money in real estate! The stock market has crashed but I still have my condos.
>>>>>>>>> well! my namesake i certainly hope your not serious ? Have you been outside or read the news lately?

#109 Eduardo on 01.30.09 at 3:50 pm

re 46 and 18: I haven’t heard about any engineers from encana being laid off. Maybe EPC companies working on Encana projects?

I haven’t heard of any oil and gas companies laying off other than service companies and EPCs.

#110 Dawn in Calgary on 01.30.09 at 4:04 pm

#90 GFP “Also, new tenancy laws in Alberta state you can break the lease with only 1 month notice, while the owner needs 3 months!”

I don’t think you are right about that

Yearly tenancy

A tenant must give a landlord notice on or before the 60th day before the last day of any tenancy year.

For example, if the tenancy year runs from January 1st until December 31st, a tenant must give notice on or before November 1st (60 days before the end of rental period).

#111 Matt Stiles on 01.30.09 at 4:15 pm

Indeed, this is accelerating. Because it has to. Those trying to stand in the way (ie. prop up prices) are doing a grave disservice to the long term health of the economy. Deflation is the cure. Rampant inflationism of the last 40 years was the disease. Prices of everything will fall to levels where people are able to buy them. Once they get there, people with savings will step in and buy them. No sooner.

Weakening the Loonie is an attempt to make this process take longer – not to avoid the process altogether. As is giving subsidies to bankrupt businesses. As is nearly everything government is doing.

I tore apart Carney’s apparent “solution” this week on my blog:

#112 Dawn in Calgary on 01.30.09 at 4:24 pm

Nope, you’re not right — if you have a year’s lease, you must give proper notice, according to the Alberta Residential Tenancies Act.

I looked it up as I was interested in moving out early, for a cheaper place, but legally, I can’t.

Notice to terminate yearly tenancy

9 A notice to terminate a yearly tenancy must be served

(a) by a tenant on the tenant’s landlord, on or before the 60th day before the last day of a tenancy year, or

(b) by a landlord on the landlord’s tenant, on or before the 90th day before the last day of a tenancy year,

to be effective on the last day of the tenancy year.

#113 john on 01.30.09 at 4:51 pm

Subject: Totally Whacked!

How the world works lately…

If a man cuts his finger off while Slicing salami at work, He blames the restaurant.

If you smoke three packs a day For 40 years and die of lung cancer, Your family blames the Tobacco company.

If your neighbour crashes Into a tree while driving home drunk, He blames the bartender.

If your grandchildren are Brats without manners, You blame television.

If your friend is shot by a Deranged madman, You blame the gun manufacturer.

And if a crazed person breaks Into the cockpit and Tries to kill the pilot at 35,000 feet, And the passengers Kill him instead, The mother of the crazed deceased Blames the airline.

I must have lived too long to Understand the world As it is anymore.

So, if I die while my Old wrinkled ass is parked In front of this computer, I want all of you to Blame Bill Gates. :-)

#114 TS on 01.30.09 at 4:59 pm

More information on Exxon’s role in funding organizations to create bogus material to try and refute climate change:

#115 miketheengineer on 01.30.09 at 5:16 pm

600,000 in Kentucky without power.

This winter just keeps getting worse…huge amount of snow “record amount” and now this….

Garth is right to recommend to us all to prepare….prepare for the worst, hope for the best.

#116 GFP on 01.30.09 at 5:27 pm

What my lease says is 90 days notice by the owner, 30 days notice by the tenant. I could be wrong on the “it is the new way its done part”, but this is what my lease says, and it is a standard form from the real estate board or something…I would not have signed it if it did not say this. I guess you guys need to negotiate your leases better….everything is negotiable. We also got them to allow us to put in our hot tub, to lower the rent from almost $2000 a month to $1550. I was a home owner. Sold it pocketed the cash and am now renting with my wife after staying dirt cheap with some family for 6 months to see what happened in the market. I guess if you broke your lease they could spend $10,000 and two years of their life trying to sue you. I can also sublease to someone else if I want. I did not go with a big rental company though, this is a private guy.

Your problem is you are following the rules too much. Rules are meant to be broken. Look at what is happening all around us. The rule breakers win. The rule followers lose. This is the way it has always been. Politics is the art of breaking the rules without looking like you are, without getting caught. You two sound like tattle tales “oh no i caught you see, here are the “rules”. Basically, you need to grow some balls, and swing ’em.

Ah ha ha I love the internet…

#117 Dave on 01.30.09 at 5:35 pm

If your grandchildren are Brats without manners, You blame television.

If your friend is shot by a Deranged madman, You blame the gun manufacturer.

And if a crazed person breaks Into the cockpit and Tries to kill the pilot at 35,000 feet, And the passengers Kill him instead, The mother of the crazed deceased Blames the airline.

if you sound like a mad man, you blame the medication

#118 Bill-Musjkoka (N.A.M.) on 01.30.09 at 5:59 pm

Most people now want to work as little as possible, because in the end it is all freaking pointless anyway. Make enough to live comfortably, and spend the rest of your time enjoying your life with friends and family.”

#105 Mike (authentic) on 01.30.09 at 3:05 pm

Mike, your generation has its good points, and yet we Boomers may have given you too much. My parents generation (circa 1907-08) were born into a dynaically changing world. They saw the advent of things like indoor plumbing, telephones, street lights, the electric lightbulb, radio, the horseless carriage, and flight.

They lived in a basically agrarian society still centred around rural farm life. At that time about 90% of people were self employed. The Industrial Revolution had recently begun, and as the decades passed the self-employed dropped to about 10%.

That has now reversed itself, again, and more and more people are self-employed. Unfortuantely, the government (all of them in the Western World) are still thinking like they did during the Industrial Revolution, that working for the ‘company’ was the (and still is) the way to go.

This admiration for corporations (personally obtuse business organizations) has led us down a path of laws written, not to protect the individual, but the souless corporation.

Then came Globalization, the corporations began buying up other companies for which they had nothing to contribute other than an economic theory. They didn’t understand the company’s business, market, or details, but merely had a management theory which has proven time and again, to be nothing more than an Empirical Acquisiton Theory, which was forecast to fail, and HAS!

My generation (circa 1946) was the real and original Boomers Generation. Our parents celebrated the end of WWII by having LOTS of SEX! They also were, I think unconsciously, replacing the tens of thousands lost in war.

I have seen the advent of TV, stereo, the transistor, micro-electronics, a vaccine for polio (My dad had it), many other vaccines, the devlopment of the computer, internet, colour TV, jet aircraft, space travel, etc.

Your generation, hopefully, will truly see the Age of Aquarius when there will be peace, respect of all people, and a true New World Order based on societal harmony and mutual opportunity. Part of that will need to be friendships, real ones, not merely acquaintances based on money.

Perhaps the Nuclear Family of your youth will become a Village where everyone shares and prospers? I most sincerely hope so. :-)

Study ethics and live by them. We do win in the end. trust me!

#119 Bonnie N BC on 01.30.09 at 6:04 pm

I think the lion’s share of posts here have missed your point. One small business at a time – they will disappear.

In our seaside part of town a little coffee bar is shut tight. The risk for small business is far more severe and will not survive.

Our one and only strip mall is pretty well vacant except for the Video store, two banks, a sports store, Claires, Starbucks and the Super-Valu grocery store and a big box store London Drugs.

Wonder what it will look like in a year?

#120 Don Bool on 01.30.09 at 6:23 pm

#115 Derrin on 01.30.09 at 4:53 pm –As for Harper …………well at least he hasn’t been hiding out in another country(s) for the last 20 years.

BS. Harper won the 2008 election and he,s going to turn out to be the loser (goat) in the end. This depression is way bigger than Harper and it is more evident every day that he has no idea what to do. We used to call it flock shooting when I was a kid. You’d shoot up a whole mess of shells and not get any ducks. It was typical of an inexperienced duck hunter. Harper,the great Canadian economist who,s whole world travel amounted to Alberta. It,s just since becoming Prime Minister in 2006 that he got out of Dodge.

#121 Patrice on 01.30.09 at 6:40 pm

Derrin on 01.30.09 at 4:53 pm
………………..and shame on Bush,Chavez, Ma Ying Jo, Wen Jian Biao,Putin…. and the list goes on……… Nobody saw this coming Amy. So shame on you for being so foolish to assume that gov’ts can predict the future. Economies run in cycles they go up and down like riding a childrens ride blindfolded at Playland.

many economists saw it coming; Patrick Byrne is one of them.

many people warn agaisnt loosening the lending standards as well…

#122 Greg W., Oakville on 01.30.09 at 6:54 pm

Hi Garth, FYI

46 out of 50 States Will Be Bankrupt by Mid-2009 According to the Center on Budget and Policy Priorities. States can not run deficits which means services will be cut (Education/Police/Fire/etc.)

#123 Greg W., Oakville on 01.30.09 at 7:11 pm

Hi Garth, FYI something to think about. 12min video

“Anyone concerned about the failure of our War on Drugs should watch this 12-minute program. You will meet front line, ranking police officers who give us a devastating report on why it cannot work. It is a must-see for any journalist or public official dealing with this issue.” — Walter Cronkite

#124 Johnny Five on 01.30.09 at 7:12 pm

For the gentleman who has the $1500 1br apt. I suggest you look out for #1 – and that is YOU! Go to your landlord and tell him to cut the rent by $500/month for February 1. Show him this site. Show him a few comparables. Ask him if he feels it would be better renting it for $600/month come June. Take Care!

#125 Ron on 01.30.09 at 7:14 pm


“It’s childhood, schooling, grow up, work, pay taxes, have a family, retire, live easy, die. You can’t put live easy and retire before work and paying taxes.”

They sure trained you well. It would have really simplified things if we were all just clones of you.

“…you can’t opt for an easy, lazy, instant gratification life because someone has to work to pay for it.”

It is amusing how older generations always equate easy with lazy. What you really mean is shut your brain off, shut your mouth and put your nose to the grindstone boy, and by the way, I’m completely justified in insulting you and your choices if you do not bend to my will and do just as I have done.

There are actually “individuals” out there looking for a more balanced way to live. By the way, I didn’t realize that you get to choose when you die.

#126 Just a Girl on 01.30.09 at 7:38 pm

#17 Dr. Doom and Gloom, re: Mayan Calendar

Or, it’s possible with the end of the Mayan calendar in 2012 we will simply get … a new calendar ;)

#127 smwhite on 01.30.09 at 8:04 pm

#115 Derrin

So Flaherty KNEW that Ontario, the #1 manufacturing province in Canada was in trouble(He should, he was the financial genius that put Ontario into the hole) last January. And went on record to say so.

Harper knew that his #1 trading partner was in trouble almost a year ago. He is an economist isn’t he?

Its it grade 3 math, if the person that gives you 75% of your apples has no apples, you get 75% less apples…

And your critiquing somebody for pointing out the extremely obvious? Obvious to everyone but you.

The only person on this blog lying Derrin is you, to yourself, it might work in the CTVglobemedia empire and for local real estate boards but this group is a little tougher to pull the wool over their eyes.

Either you buy your ear muffs from the same guy the CPC does, or your just a partisan prat. Pony up and admit your “Dear Leader” blatantly lied, whether it was to protect the public or protect his position, you can be the judge, but it was one of the two, it wasn’t a blind sided event like 9/11.

You better go back through these entries in this blog and see just what just what the majority of the posters here, with any longevity have been posting, most have been 100% bang on since the beginning… That includes the drop in equities and housing…

#128 David on 01.30.09 at 8:05 pm

Too bad and so sad for the career realtors that are now worried. They expect a hollowed out economy to indulge in more phantom wealth creation through housing bubbles. It would be fair to say that the party is now officially over and the sooner they realise this truth the better. Get a day job if you folks can find one. I certainly will not get lachrymose for those parasitic bums in the real estate industry. Good Bye and good riddance to the real estate cowboys who contributed so much to the total collapse of our economy.

#129 dekethegeek on 01.30.09 at 8:26 pm

#71 Dr Doom and Gloom’
…. ” I’ve often heard my generation described as lazy, unmotivated , etc.
…..Most people now want to work as little as possible,whats the freaking point anyway…”
Yup, your the generation thats gonna get taxed to death paying for my generations’ retirement. That’s why I’m trying to save up enough money to “go it alone” unlike most of my “financially illiterate” co workers.
I can’t tell you how many 25-35 year olds I have fired because they can’t fathom that when I pay you to work 8 hours that doesn’t include your talking/texting on the computer/phone for 6 of the 8 hours. If “working as little as possible” has gotten you by til now , congratulations!
But I think in the next 2 to 4 years your gonna just hate what is coming. Gasp! Working 8 hours a day, Dont be late! Turn off the cell phone! Stop surfing the Net! Don’t take too many bogus “sick days”.
Enjoy ” just getting by because sure as s**t, you are going to be retired someday and if you’ve been “humping the hound” and not preparing for retirement I hope you like Greeting people at WalMart and eating cat food.
Thats why my generation works, you arrogant self assured idiot. Grow up! Move out of your parents house.

#130 AM on 01.30.09 at 8:29 pm

# 97 FP
An interesting comment in the comments section of that article.

svetlana bogen from toronto, Canada writes:
Something this article failed to mention: the buyer’s agent was Nancy Freeman, the mother of the seller’s agent, Eldon Freeman. Interesting coincidence.

* Posted 30/01/09 at 4:39 PM EST | Alert an Editor | Link to Comment

#131 EW on VI on 01.30.09 at 8:35 pm

71 Doom and Gloom. Sorry that was pretty funny. I had a good chuckle. Please bear with me.

Remember those films from the 60s with the stoned hippies listening to Hendrix etc at woodstock? And those young people protesting the war in Vietnam and the “military-industrial complex” and the “establishment? Yep, most of them became those greedy 60 year old boomers which Garth speaks so fondly of (because he is one hehe).

Its no different now and then. I’m a comparatively young boomer, and my Dad grew up in the depression. It seems like we were constantly reminded of how much stuff my
generation had, all the opportunities, and for comparitively little work. And ya know he was right. We
had it much easier than he.

But my kids have that much more than I did. The alarming thing is that it is just there, their whole lives,
they just dont know any different. So a sense of
entitlement can almost be expected. I can sit on a beach and enjoy it with one of garths books. They need a cell phone and Ipod, wait, sorry, that’s just one item these days isnt it, and it has a camera too.

Remember, everybody who is 45 has been 25. Nobody who is 25 has ever even been 26.

Go ahead and live your dream. It just might change a bit with age……

#132 Pat G on 01.30.09 at 10:01 pm

To Dr. Doom and Gloom

You say the older generation used to expect to grow up, have a family. work, retire and die. Well I’ll be seventy-six in February and that isn’t how I felt at all.

I thought I would do those things but, like Auntie Mame, I believe life is a banquet and half those suckers out there are starving.

But I also believed that I didn’t want to hand this world over to the next generation in the sad state in which we find it today. To this end, when I had a chance to make something better, I felt obligated to do so. Why should I dine out when too many couldn’t get to the banquet — and in fact, when fairness and justice were only empty words mocking them.

There is a lot to life and some of it isn’t about me. In fact, most of it isn’t about me when it comes right down to it.
I don’t think anyone is really satisfied with the way things are now,do you? If we don’t take time to look after the problems in the world, they eventually find us.

Looks like the banquet is getting smaller but we could still make room for a few more people, don’t you think? Maybe we could all find a little more balance in our lives and maybe things would get better.

Always hopeful.

#133 Third Chimp on 01.30.09 at 10:32 pm

If Jim Flatulence is truthful – he had no idea this was coming – then it is bad since it means the ones pulling levers have no effin idea.
If he is lying – then it is very bad, because then the election timing was just a gambit to consolidate power before TSHTF, and they were cynically doing *nothing* about it with their first budget.
Either way – the wouldn’t know what to say if they didn’t first check USA Today for how the American are spinning it.

#134 Accremonium on 01.30.09 at 10:35 pm

#21 DVDA on 01.29.09 at 9:01 pm

Can some one knowlegable comment on that fact that if the US goes into protectionist mode, can we not sell our products elsewhere?

Knowledgeable? but it occurs to this former steel maker that if the USA wants to make its own steel, it needs lots of Iron Ore, natural gas, some oils, not to mention Ferro Silicon, Ferro Manganese, all of which it needs to import. Now, is the time to remind their legislators, that, we can pull out of Afbunglestan and put all our guys and gals on our Southern border to keep our resources at home and them out while we negotiate sales to Japan, China, and India. In other words, you want gas, and oil, then you have to buy our steel, PEI spuds, hogs , cattle, and soft wood lumber at fair world prices or NAFTA is dead and buried. On top of that there will be a requirement for them to buy automobiles in the same proportion that they were mfg before this crap hit the fan as to their own production. It is well known that Canadian Steel Mfg, and Auto Assembly is the most efficient and profitable compared to any of theirs.
Finally we need politicians will the Guts, Gonads, and Gumption to insist that all the financial controls that were removed during the lame duck Congress of 2000 be reimplemented post haste, or no go.
What does it take to get the proper rules and controls written in stone and permanent? Incorporating them in the Constitution?
As for your final comment, Garth: “Between now and then it gets worse. But maybe when we get there, the world will be a more honest place”. That will NEVER happen, Sir, unless this species has a major mutation! It seems to be part of our DNA of Homo Sap. to be devious, duplicit, and depraved!

#135 Bottoms_Up on 01.30.09 at 10:50 pm

A piece of mail I got today from a major Ottawa home builder regarding buying a 2 bedroom home (careful, swallow your milk before reading this or it might come out your nose):

‘The Longer You Rent, The Less You Own’

“Be A Homeowner For Less Than $900.00 A Month”

“Based on 5% down, 3-year fixed with interest rate 4.99%, amortized over 35 years”

“But here’s the best part, when you own a home, those monthly payments accumulate into equity. When you rent, those monthly payments accumulate into nothing.”…..”Because the longer you pay rent, the less you end up with in the long run.”

#136 Roial1 on 01.30.09 at 11:35 pm

No one saw economic crisis coming: Flaherty
Head line from the Globe and mail.

hey Garth, does this not show that flarehead is a dunce?
You wrote your book LOOOOOOONNNNGGGG before this jerk spoke.

#137 Roial1 on 01.30.09 at 11:36 pm

Sorry, should have been “Financial Post” head line.

#138 phil g on 01.31.09 at 12:15 am



I think destiny played a part here, as in all nice and cuddly.

#139 David on 01.31.09 at 12:19 am

Everyone deserves “tough love” except the people that created this mess right?
Tough love is quite selective. Get well enough placed and get bailed out for being a fool and a scum bag.
Finance 101; price risk and assess adverse selection. The housing bubble was above all that nonsense. NOT!!
Welcome to the era of hard times. My heart turns to stone at the thought of insurers, realtors and bankers.

#140 dd on 01.31.09 at 12:42 am

#109 Eduardo

“I haven’t heard of any oil and gas companies laying off other than service companies and EPCs.”

Oh keep your ears open … it is happening. 1st the contractors are being layed off in big numbers. Now we are moving onto select firing within the company. How many people have been shown the door in the last month alone? One here … one where. If energy prices do not hold what next?

#141 Third Chimp on 01.31.09 at 12:45 am

OK, I’m starting to get this politics thing. If a politico is smart and talks about some solid truths, they will never get elected because the herd can’t distinguish the wacko fringe from the few who know (also on the fringe) because the truth is usually at odds with the common myth (eg material progress is endless for as long as you care to say). Normally, things don’t change too quickly (if the *govern*ment can help it), so talking but saying nothing until the herd gets itself pointed in a new direction is just being practical. But this strategy fails when things change quickly, the herd is confused, and can’t find any good direction which the politicos can then get behind. Like now. So we have policy pirouettes and spin doctors and “no one could have known” etc. If you want to see where we’re going, you’ll have to look in much better places than an Ottawa press conference.

#142 dd on 01.31.09 at 12:50 am

#57 Dave

Oh that is a funny one Dave … tell another joke will you.

“A bull market will emerge before you know it… It was your foresight and going against the grain at all odds that put you in that great position. Why are you losing sight of that now?”

Ok too funny. Stop making me laugh

However I will still wait until RE is affordable really. Buy all metrics prices are still too high for incomes. When the prices are too good to be true … when properties are cash positive at a higher interest rate and are actually an investment opportunity … then I will be interested.

#143 phil g on 01.31.09 at 12:50 am

Hi #137 my thougth would be.

Yeh man, buy my problem, o’yeh.

I myself am looking forward to all those fun things in life, and intend to enjoy them all.

I should add that in these lean and mean times, I hope for the best that the Lord may deliver.


#144 dd on 01.31.09 at 12:52 am

#19 David Halfkenny

“These closings are normal during a ressession.”

However this is no normal ressession.

#145 Investx on 01.31.09 at 1:22 am

““But here’s the best part, when you own a home, those monthly payments accumulate into equity. When you rent, those monthly payments accumulate into nothing.”…..”

This is true for the most part and desirable if monthly costs of mortgage are close to ental costs.

#146 Dave on 01.31.09 at 1:57 am

Ok too funny. Stop making me laugh

However I will still wait until RE is affordable really. Buy all metrics prices are still too high for incomes. When the prices are too good to be true … when properties are cash positive at a higher interest rate and are actually an investment opportunity … then I will be interested.

i clearly stated that a bull market would emerge but not in real estate. The world never ended in any of the past downturns. If you’re fixed in a pessimistic frame of mind, you’ll miss the next bull run. Bull markets don’t give warnings….

are you saying this is the end to everything? you laughed at my post which means you disagree with a bull run. I’ll tell you here and now, there’ll be a major major bull run in energy when the dust settles. Although countries will probably suffer inflations in the future, governments have been propped up with cash for now. They’re eager to get things moving and eventually they will

#147 Wealthy renter 2 on 01.31.09 at 2:09 am

Peak Oil theory will never stand up to demand destruction. We were supposedly running out of oil in 1973. I’ll be damm glad when we actually run out of oil (for real), because then, maybe our children and grand children will live to see theirs. I wish the mistakes of one generation could just be the mistakes of one generation – Not passed down for the next 3. (Peak oil isn’t going to happen in 2009 or 2010 or 2011 or 2012 causing the next major bull run for the next decade) Its a joke. its like believing the realtors.

#148 JOLM on 01.31.09 at 3:02 am

I think most Government STIMULUS INVESTMENTS
should focused on the food supply…..
Food business and support busines is essential to all
other business.
Food business and support must not fail or monopolies.


#149 Ron on 01.31.09 at 4:24 am

#131 dekethegeek

You’ve managed to use every tried true and tired cliche(I’m too lazy to look for the accent) that you were able to think of.
You forgot to mention the sheeple, the herd and the economic fundamentals.
Let me give your language a try: It’s all good, Git er done and Cheers.

#150 Bottoms_Up on 01.31.09 at 10:04 am

147 Investx on 01.31.09 at 1:22 am
true. equity builds if prices are stable or going up. But what if prices are going down? (fyi–in ottawa, Dec08 real estate prices were down to Oct 07 levels….)

#151 Future Expatriate on 01.31.09 at 10:04 am

#97, this is going to sound paranoid, but here goes anyway.

I wouldn’t put it past some gov types to put together a loosely knit group of real estate shills to create a faked scenario like this solely for the purpose of the newspaper article that resulted.

Not for a single second. From the same folks that gave us the endless bs that resulted in the bubble in the first place. Now they’re trying to dig themselves out of the hole.

It won’t work.

#152 Amy Clowater on 01.31.09 at 11:26 am

#115 Derrin

You need to learn how to read. If Mr Harper had listened to what his own MP, Garth Turner, was saying…. he would have know this was coming. Garth did and has been trying to tell us for a long time.

Thats why I thought it was funny. Garth was telling them, they just chose not to listen. Kinda like you chose not to read…..

#153 Charles on 01.31.09 at 12:11 pm

Re #80 Future Expatriate
The future is xurbia with windmills in every yard and solar panels on every roof. And sustainable wood furniture from plantations. Not oil.

Just finished a book someone here on this blog recommended called The Long Emergency by James Howard Kunstler. Very addictive and sobering reading, I highly suggest it as a great read, scary but informative good read.

Basically he says we are DREAMING if we think wind turbines and solar panels are going to replace the cheap oil we have been relying on. He says that turbines and solar are technologies BASED on the cheap oil industry and when the oil is gone, so too will be the so-called free energy technologies.

If there is no cheap oil, who is going to deliver these items to your house? How are you going to get replacement parts? Who’s going to do the maintenance, repairs?

Just more squirrel food for thought.


Chapter 4

Why Alternative Fuels Won’t Rescue Us,M1

#154 Charles on 01.31.09 at 12:14 pm

Re Houses selling fast in the Annex

Annex is a very special HOT neighbourhood in Toronto with loads of pent up lust for some people to live there and I guess they think this is their big chance.

Do not be fooled as they are.

Plus Eldon’s strategy is to list the price super low. If you think you’re house is worth 860,000, he will list it at 799,000. All his houses say ‘sold 115% over list price’. Easy to say when you list it so low. By the way, Eldon is an awesome smart agent, he’s great for stubborn folk, making them see the light.

#155 JAY on 01.31.09 at 12:25 pm

#97- There will always be people who think they can catch a falling knife. Ultimately, few can. This could cause a (small) dead cat bounce or two in certain pockets of the market on the very loooong way down. Unfortunately, these people won’t have to wait long to realize they have made a very costly mistake. Once the spring inventory glut arrives and prices REALLY tank, they too will have joined the Greater Fool fraternity (see present-day Richmond for best membership prospects). Continued growth in unemployment and lack of confidence will compound matters. It is tragic, but proof that even with all the frightening data points we have to work with, rationale thought goes out the window when a real estate purchase is involved. Buyers still cannot fathom the corrections that are on the horizon.

#156 dd on 01.31.09 at 1:11 pm

#149 Wealthy renter

“I’ll be damm glad when we actually run out of oil (for real), because then, maybe our children and grand children will live to see theirs.”

There is a problem with running out of oil when you are not ready. It is called starvation … It is called war. More than likely your children will not survive.

#157 dd on 01.31.09 at 1:14 pm

#148 Dave

“If you’re fixed in a pessimistic frame of mind, you’ll miss the next bull run. Bull markets don’t give warning ”

Oh … there will be a bull run for sure. With the supply of oil and commondities limited … this may be the biggest bull run of our lives.

However real estate … not for a long while.

#158 Dave on 01.31.09 at 2:44 pm

Peak Oil theory will never stand up to demand destruction. We were supposedly running out of oil in 1973. I’ll be damm glad when we actually run out of oil (for real)


you clearly have little understanding of what is meant by peak oil, but I’ll pretend I’m having a discussion with someone who’s familiar.

Peak oil refers to the amount of oil available at a REASONABLE cost. There’s over a hundred years worth of oil in the ground, but its the cost that is required to extract it that is the problem. The major oil fields, the Saudi fields in particular, are experiencing sharp declines. They have what is called light-sweet crude. Their Ghawar field has its limitations at roughly 9 million barrels a day. With the extreme demand that will be coming out of China and India, how can you assume that there won’t be supply issues? Demand for the stuff will be well over the 85 million barrels that are supplied during this past decade.

oil reserves found in the middle of the ocean isn’t a great break through. By the time the stuff is passed on to you and I, its no longer economically feasible- at least a lot less feasible than the the oil from the 3 major fields in Saudi Arabia and the major fields in Russia

cling onto that belief that there won’t be supply issues with oil….change doesn’t happen in your world

#159 Dave on 01.31.09 at 2:58 pm

Peak Oil theory will never stand up to demand destruction. We were supposedly running out of oil in 1973.

that was peak oil. It was peak oil for the American oil fields. Since then, those fields experienced sharp declines making it expensive to extract. The fields overseas don’t behave any differently. They share the exact same traits as the fields that experienced peak oil in the past! That whole issue transpired prior to Saudi Aramco which is where the U.S got most of their oil for the past 40 years. So basically, the U.S was depending on their own oil and hit a roadblock. It was the Saudi fields that bailed them out of their energy crisis.

In the 1970’s, when U.S oil companies were in control of Saudi Aramco, they estimated there were 108 billion barrels of oil remaining. In the past 20 years, 50 billion barrels have been used….there is great research and data availabe on the topic

#160 Accremonium on 01.31.09 at 4:27 pm

#160 Dave on 01.31.09 at 2:58 pm
#159 Dave on 01.31.09 at 2:44 pm

Dave, there is not a shortage of oil, only a dwindling supply of easily tapped free flowing crude. The State of Colorado has more oil in shale rock than all of Saudi and much of the Middle East, and this does not include other shale deposits in N. American lands. When the price of oil stabilizes at levels high enough to support the mining and extraction from shale, the oils sands will suddenly be forgotten by the narrow shallow minds.
What needs to be done is government intervention to stabilize prices and set quotas, and enforce reasonable rationing. Much oil should be reserved for lubrication and other fuel sources exploited for engines. Also the synthesized esters can assist with lubrication needs. But greedy short sighted money grubbers can’t be taught that boom and bust MUST be replaced by long term planning and controls. Much of our current problems are a direct result of the deregulation demands of these maniacs. Even if the fundamental financial rules were cast in stone in the Constitution they would do everything to get them removed or negated. Most of what has happened has happened before if you read and retain the lessons from the 1900’s to 1939/40. Denying it can happen again has been a case of Wall Street Roulette in which the chamber loaded with the Lyman Bros. situation came up and “oh let them go under” “serves them right”! Well it is now felt that this was the trigger, but the ammunition dump was attached!
No amount of bail outs will work as long as people do not have confidence that they will have a job, their savings will not evaporate, and in short the powers that be can be trusted! So what to do? Lay off everyone, bankrupt all companies, and have the government seize all assets, then reassign every thing and everyone to get back to work! While it is possible, it won’t work simply because no one trusts or believes anyone, least of all Harpercrit and Flipperty!
Until you, I and everyone else gets with the program and demands that all politicians answer to We the Peoiple, not party backroom blowhards, and Uppity Corpulent Manglement, there will always be insecurity and suspicion that the more eloquent and powerful will exercise undue greed for personal gain to the detriment of the whole of society. So suffer until you can smarten up! I have lived my life and recall many ways that I and others have been discriminated against on many accounts. Once I am gone, I won’t need or know, nor care!

#161 Accremonium on 01.31.09 at 4:58 pm

#125 Greg W., Oakville on 01.30.09 at 7:11 pm

Greg, FYI this whole idea/scheme if you will was very well documented in articles in The
Saturday Evening Post Magazine in the mid 1950s. If you research that try 1954 for a start! It makes you wonder just how smart and absorbent many of our leaders are!
Drug legalization also comes with some very strict rules, like surrendering drivers licenses, etc. But the remove the profit from the illegal business by legalization has been available for that long and it makes sense since the daily maintainance dose of most opiates is very cheap. It is in the order of the cost of a package of cigarettes. The savings to society could be enormous, and all the resources now tied up could be turned onto many other equally serious problems, but be careful where you talk about this as it seriously rocks the deeply held myths and fantasies of the powers that be!

#162 Dave on 02.01.09 at 1:34 am

#162 Accremonium on 01.31.09 at 4:27 pm

the political debates we seen between Obama and McCain stressed the importance of energy what to do going forward. Next to the economy, this seemed to be the biggest concern and question mark. Apparently, you know more than they do. In fact, you know something all of China, Russia, India & Brasil don’t know as well.

All the countries above have stated the absolute need for alternative fuels in their respective economies. Where do you suppose China and India will be getting their oil fix? Aren’t there extreme health hazards for these economies that are growing like tidal waves to be using carbon based fuels? 4 out of 100 people in China own a car- a balance that will surely stabilize as years come. Where are these vehicles going to be getting fuel from???

Colorado isn’t going to fill the world’s need for energy. There hasn’t been a major oil field discovery in 40 years. The faster we become independant from politically unstable countries (Iran, Iraq, Saudi Arabia, Russia) the better off and safer we’ll all be.

The next bull run is in energy :)…thats as much as I’ll say

#163 Bill-Muskoka (N.A.M.) on 02.01.09 at 10:21 am

Regarding oil and its source. When I was a young lad I was told it was the result of dinosaurs, and coal was the result of vegetation. I even have a book my father left me published by Shell Oil that says the same thing.

Now, coal makes sense, but dino oil? Not hardly. Just consider how much oil we have extracted, and still have, and then relate that to how many trillions of dinosaurs it would have taken to produce all of that oil.

However, reality is that oil is most likely (based on science not legends, myths, or Voodo Philosophies) the natural product created continuously by the Earth itself.

Think not? Read these two (of many articles) and then re-think the entire fiasco and fraud that is Peak Oil.

Is the Earth Producing MORE Oil?

Sustainable oil?

Perhaps, we underestimate the ingenuity of the Creator to provide for our needs? Now, the real question is ‘Will we be wise enough to use those provisions in a responsible manner as good stewards of our home?’

Could it be that all the carbon we release is re-absorbed, re-cycled, and made back into more oil and gas? I think the Earth may be far more functional than the surface nuisance we call mankind.

Meanwhile, those lusting after fast profits continue using FUD to extract not more oil, but money from our wallets on the Commodities Exchanges.

BTW, the current BS is the I lived through back in the mid 1970’s when the World was coming to an end then. Lack of regulations have caused the current problems, not lack of oil. It is just the same ignorant scam those without a conscince have been playing all along.

#164 John Semenski on 02.23.09 at 8:42 pm

Doom and Gloom…..lets just keep spreading it people….that’s right….spread the bad news all you can after all, it sells newspapers, books…etc. We realize today that their is a global recession….did we think for a minute that it would all be perfect? It’s an adjustment we need to have to bring us all back down to reality. Adjust, tighten your belts, use your money smartly and realize that this too will pass. I saw back in the early nineties developers go bankrupt and home sales hit 1100 homes in one year between a number of builders. Tomorrow will bring another day, be greatful we are still here to see it. Stop whining!!